Why the iSelect (ASX:ISU) share price is rocketing 5% Thursday

ACCC finds there are no problems with rival CompareTheMarket.com.au owning a piece of the ASX-listed comparison site.

| More on:
A drawing of a rocket follows a chart up, indicating share price lift

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The competition watchdog has cleared a shareholder of iSelect Ltd (ASX: ISU) of any wrongdoing in attempting to buy up more stock.

In November, the Australian Competition and Consumer Commission (ACCC) started investigating the activities of iSelect shareholder Innovation Holdings Australia (IHA).

The potential problem was that IHA, via a complex web of entities, also owns CompareTheMarket.com.au, which provides similar services to iSelect.

Both brands are rivals in the competitive comparison site sector, allowing Australians to contrast different energy, insurance and financial services providers.

IHA had already bought up 29% of iSelect shares over 2 years without notifying the ACCC. The watchdog was prompted into action after it was tipped off about an additional 6% purchase.

ACCC commissioner Stephen Ridgeway said at the time that such arrangements could "give rise to competition concerns".

'Unlikely to substantially lessen competition'

In good news for IHA and current iSelect shareholders, the ACCC on Thursday announced it would not oppose the 6% buyup.

The commission concluded that a 35% stake would be "unlikely to substantially lessen competition" in the comparison site market.

"Other routes to market exist for providers – including other comparison websites," Ridgeway said on Thursday.

"There are also government websites available to consumers such as www.energymadeeasy.gov.au and www.privatehealth.gov.au."

The iSelect share price is up 5.45% at the time of writing, trading for 29 cents.

iSelect owns the comparison engines iselect.com.au and energywatch.com.au. IHA is associated with the insurance brand Budget Direct, as well as the CompareTheMarket.com.au site.

When the ACCC investigation first started in November, a CompareTheMarket (CTM) spokesperson denied that it was owned by IHA.

"CTM is owned by Financial Holdings Australia (FHA), which has shareholders in common with IHA, but the two are separate entities," she told The Motley Fool.

"The group structure is convoluted, but while Compare the Market and Innovation Holdings Australia share common investors, it is not accurate to state that CTM acquired shares in iSelect."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

a young woman raises her hands in joyful celebration as she sits at her computer in a home environment.
Share Gainers

Why Avita Medical, GenusPlus, Mesoblast, and Polynovo shares are storming higher

These shares are having a better day than most today. But why?

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why EOS, News Corp, Polynovo, and Pro Medicus shares are roaring higher today

These shares are starting the week positively. But why?

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
Share Gainers

5 ASX 200 stocks marching higher this week even as the market sinks

These five ASX 200 companies are shrugging off the broader selling to march higher this week.

Read more »

Rising share price chart.
Share Gainers

Why Novonix, HMC, Karoon Energy, and Ventia shares are pushing higher

These shares are ending the week on a positive note. But why?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Share Gainers

3 top ASX 200 stocks I wish I'd owned in 2024

These three top ASX 200 stocks are racing higher in 2024.

Read more »

Man pointing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Champion Iron, EBR Systems, Mesoblast, and Patriot Battery Metals shares are surging today

These shares are avoiding the market selloff on Thursday. But why?

Read more »

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors ended up snatching defeat from the jaws of victory today.

Read more »

Excited group of friends sitting on sofa watching sports on TV and celebrating.
Share Gainers

Why Clarity, Omni Bridgeway, Santana Minerals, and Vulcan shares are pushing higher today

These shares are having a good time on hump day. But why?

Read more »